UNICA: Higher percentage of cane harvest to go to ethanol

The Brazilian Sugarcane Industry Association (UNICA) has announced it is projecting a cane crush of 580 million tons for the 2014/2015 harvest. This is a 16.94 million ton reduction from the 2013/2014 crush of 596.94 million tons.

According to UNICA, the projection reflects a 5 percent increase in the area available for harvesting, but a significant drop in yields resulting from the long period of drought that extended from late 2013 into early this year.

“The contraction in the level of cane-field renewals at the beginning of this year reflects the difficult financial situation that producers are facing, with many units not in a position to invest in planting,” UNICA Technical Director Antonio de Padua Rodrigues said in a statement. This will raise the average age of cane fields in the coming year, with a negative impact on the volume of raw material available for crushing in 2015/2016.

When compared to 2013/2014, agriculture yield is expected to drop by approximately 8 percent in 2014/2015. UNICA estimates that the amount of sugarcane processed in 2014/2015 will be 2.84 percent less than in 2013/2014.

Information published by UNICA indicates at least 10 mills have confirmed they will not operate in 2014/2015. “The scenario is a cause for concern. In addition to the 10 mills that could possibly close, more than 30 units have entered bankruptcy proceedings, and several other units are in precarious financial situations,” Rodrigues said.

Regarding ethanol production, UNICA estimates 56.44 percent of cane processed will be used to produce fuel, up 1.66 compared to 2013/2014. As a result, ethanol production is expected to increase by 1.2 percent, reaching 25.87 billion liters. If the blend rate of anhydrous ethanol in gasoline is increased to 27.5 percent in July, Rodrigues said sugar production could drop even lower than its current production forecast of 32.5 million tons, a 5.23 percent reduction from last year.

In a separate recent announcement, UNICA reported that domestic ethanol sales in Brazil’s south-central region increased 23.49 during the 2013/2014 season, reaching 23.07 liters. During the prior year, only 18.68 billion liters of ethanol were sold domestically.